Category: Legal Operations

This week, Bodhala participated in Consero’s virtual conference – Legal Operations & COVID-19: How Law Departments are Adjusting for the Future.

Bodhala CEO, Raj Goyle led legal operations leaders from Fortune 500 companies through dynamic conversations on how to leverage data to make more informed decisions on spend management and pressing diversity initiatives during these challenging times.

Here are some of the key themes from the sessions:

Data is the key to driving real change.

• From cost optimization to compliance to diversity and inclusion, legal operations professionals are looking to leverage data to drive actionable change within their legal departments. One attendee, a legal operations business analyst, noted that her company is relying heavily on data to understand the diversity of the law firms they utilize and the timekeepers staffing their matters. Numerous attendees shared that although data is the key to driving change, it is difficult to rely on data from e-billers as it is both messy and inaccurate. Check out our infographic, 7 Reasons Why You Need More Than an E-biller to Create a Winning Legal Department, to learn more.

The pressure to cut costs is on.

• Attendees noted the increased pressure to cut costs, as their CFOs have started to examine legal bills with heightened scrutiny since the start of COVID. Outside counsel rate cards were identified as the “low hanging fruit” that can offer immediate savings. Most companies approved their 2020 rate cards ahead of the global pandemic outbreak in March, meaning that the majority of companies are being charged inflated rates that do not reflect the current economic climate. One attendee, a legal operations specialist, noted that she, in tandem with the company’s general counsel, would be evaluating the legal department’s spend line by line to identify cost efficiencies in response to pressure from the CFO. To learn more about how legal operations professionals are championing their roles in response to COVID, check out our most recent whitepaper.

There is a magnifying glass on diversity.

• Given the current climate, diversity initiatives have accelerated as companies are carefully evaluating their efforts to promote a diverse and inclusive environment, both internally and externally. Legal departments are implementing various measures to hold themselves and their law firms accountable. But, the bottom line is that data needs to drive these changes. One attendee, a legal operations business analyst, shared that her team is relying on data to examine the diversity of timekeepers staffed to her company’s matters after noticing an extreme lack of gender and racial diversity within her panel firms. Read our blog post to understand how Bodhala is helping teams make data-driven decisions on diversity and inclusion.

Ways to Act on Diversity Now

Understanding the diversity of timekeepers staffing your matters and tracking origination credit is the quiet revolution that will lead to diversity in the legal profession. 

If there was ever a moment for legal operations professionals to take the bull by the horns, the time is now.

Ask your GC if this information is currently being tracked, and if it’s not, ask why.

Are you armed with the data you need to drive change within your organization?

Bodhala’s Insights

Bodhala is passionate about empowering legal operations professionals with actionable insights that can drive meaningful change within their organizations.

From top timekeepers to average hourly rates, and everything in between, all you need to know about your outside counsel spend and law firm staffing is housed in your data. 

Bodhala arms you with the data you need to hire the right lawyer at the right law firm at the right price.

Hercules, “the god of analytics” is Bodhala’s trailblazing proprietary database that operates as a single source of truth for legal data, and provides our clients with a 360° view of the legal market.

Running on Hercules, the Bodhala platform has an intuitive dashboard that analyzes:

• Rates
• Observed discount percentages at relationship and practice area/work type level (anonymized)
• Matter types
• Factors that create peer sets, providing accurate apples-to-apples comparisons of cost and staffing
• Timekeeper diversity

With our platform, Bodhala clients have utilized data and metrics to review invoices with heightened scrutiny, implemented scorecards to create true side-by-side comparisons of law firm rates and performance, evaluated firms’ diversity based on data-backed insights, and more. 

Bodhala’s Resources

We’re here to help you find efficiencies in your company’s legal spend – connect with us to learn more about how we can help.

Salvaging a business during bankruptcy comes with a hefty law firm price tag.

Surviving bankruptcy is a delicate balancing act. 

As businesses scramble to preserve assets and employees, they must retain law firms that can guide them through the unknown. 

In some of the largest bankruptcy filings within recent years, law firms have received massive payouts while significant workforce reductions occurred. 

More often than not, employees are laid off without severance even though company executives, boards, and bankruptcy judges allow law firms to charge hugely excessive fees throughout the bankruptcy process.

Company executives and board members have suffered severe reputational damage by not effectively managing the needs of their distressed businesses and employees.  

Although layoffs are often inevitable and lawyers play a critical role in bankruptcy filings, Bodhala data shows that law firms have charged exorbitant rates that exceed those of other mission-critical legal services.  

History will repeat itself during COVID as a potential record number of bankruptcies loom.

Enter Bodhala.

There is power in your data to control spiraling legal fees. 

Bodhala’s Hercules database – consisting of 32,000+ law firm profiles, 5 million matters, and over 500,000 timekeepers – helps you ensure you hire the right lawyer at the right law firm at the right price. 

Historically, rates for bankruptcy and restructuring work are undiscounted street rates. As the Trustee Program states, the rates must be comparable to similar work, but our data shows that rates for similar work are significantly lower than those currently being approved by the Trustee Program.

The market is significantly overcompensating law firms for bankruptcy and restructuring work. 

Throughout some of the largest bankruptcy cases over the past several years, employees suffered immensely while law firms padded their wallets. Let’s review how this played out at Lehman Brothers and Toys “R” Us.

Lehman Brothers

The investment bank’s collapse came in September of 2008, catalyzing the financial crisis that rocked the U.S. economy to its core.

More than 30 law firms were retained throughout the bankruptcy and liquidation process, making Lehman Brothers the most expensive bankruptcy in history. Firms accrued over $2 billion in legal fees.

Lead counsel for the investment bank, Weil, Gotshal & Manges, racked up over $484 million with lawyers billing up to $1,000 per hour.

So what happened to the employees?

The company’s entire 25,000-person workforce was laid off.

Employees were angry, distraught, and left to pack up their desks while bankruptcy lawyers began their feeding frenzies. 

Lehman’s CEO, Richard Fuld, suffered severe reputational damage as a result of the bankruptcy. Some referred to him as one of the worst CEOs of all time due to his negligence in protecting the company from the inevitable doom when he had the chance.

Toys “R” Us

The beloved toy store chain succumbed to bankruptcy in 2017.

As a result, the company received a hefty legal bill as their lead counsel, Kirkland & Ellis, took home $56 million.

Judge Keith Phillips reviewed and approved the firm’s fee application which listed the top two earners as raking in over $3 million dollars, billing hourly rates between $995 and $1,480. 

105 partners and 131 associates at Kirkland & Ellis worked on the bankruptcy case with seven partners and associates billing over one million dollars EACH in fees. 

What did the Toys “R” Us employees take home?

The employees who missed out on Thanksgiving dinners to accommodate Black Friday shoppers, those who sacrificed family gatherings to cover shifts, and spent their birthdays working instead of celebrating…they must have received something, right?

Think again.

The entire 33,000-person workforce was laid off without severance pay. 

Though the company initially promised employees severance, they quickly rescinded the offer as the retailer continued its downward spiral.

The Toys “R” Us bankruptcy was an outrage and led to the public shaming of the executives, board members, and bankruptcy judges that oversaw the filing.

The list of cases in which employees suffered while top law firm partners walked away with huge sums of money goes on. It will only continue to grow throughout the COVID crisis if we do not hold law firms accountable.

It is now more urgent than ever to find efficiencies in your company’s legal spend.

Bodhala is your partner for making this happen.

Our platform helps you ensure that you are balancing precious dollars between employee stakeholders and law partners.

Real transparency, real accountability, real control – that’s what we’re all about.

While events and in-person meetings are on pause in the age of COVID, Bodhala has fully embraced the opportunity to learn and connect with others virtually.

Earlier today, Bodhala participated in Consero’s Virtual Knowledge Bridge – Leading An In-House Law Department Through Uncertain Times: Challenges & Opportunities For The Legal Operations Practitioner.

Throughout each session, leaders from top Fortune 500 companies shared how their legal departments have pivoted throughout COVID.

Here are our main takeaways:

• It’s legal operations’ time to shine. As companies continue to work remotely, legal operations teams have been critical in ensuring the smooth, seamless transition of hundreds to thousands of employees. One attendee, a Head of Legal Operations, shared that her legal operations team turned into a daily command center, proving them to be an essential arm of the department. Legal operations teams have been brought on for additional support in various areas of their departments. Another attendee, an SVP & COO, Legal & Associate General Counsel, noted that his team shifted their focus to supply chain and public policy matters in a project management and data coordination capacity. To learn more about how legal operations professionals are championing their roles in response to COVID, check out our most recent whitepaper.
• Increased cost pressures across departments. Though many attendees expressed that cost pressures existed before COVID, the pandemic has accelerated the need to operate economically. A Director of Legal Operations & Governance, shared that her company’s finance team is looking at all costs with heightened scrutiny, citing outside counsel spend as an area of focus. Another attendee expressed that there is heavier cost pressure within his legal department as he cited a 60% focus on internal costs and 40% focus on external costs – like outside counsel spend.
• Varying levels of maturity within legal departments. As heard throughout this morning’s sessions, legal departments are operating at varying levels of maturity. Some teams have been quick to implement thoughtful cost reduction changes with their outside counsel while others are still getting their bearings amidst the crisis. A Manager of Legal Operations noted that her team is paying close attention to how their law firms share in the burden of this crisis as this will affect her team’s future panel arrangements. A number of attendees also noted that their legal department’s refused rate card increases in 2020, offering significant savings. Another attendee shared that his team locked in 2019 rates for two years, allowing 50% savings.

Bodhala’s Insights

Bodhala CEO and Co-Founder, Raj Goyle led attendees through examples of cost pressure challenges our clients’ legal departments have faced during the pandemic and how they leveraged Bodhala’s platform to take back the reins from their law firms.

As company executives evaluate spend categories with a keen eye, the need to optimize legal spend has become even more urgent. 

The key to implementing meaningful change is through data. 

Everything you need to know about outside legal spend is housed in data – from top timekeepers to average hourly rates, and everything in between.

If you’re considering relying on your e-biller – think again. 

Data pulled from e-billers is typically chaotic, and more often than not, inaccurate. Check out our infographic, 7 Reasons Why You Need More Than an E-biller to Create a Winning Legal Department, to learn more.

Now, more than ever before, companies are relying on their legal operations team to deliver actionable, data-backed initiatives that can guide the business through COVID and set the stage for a successful future.

Bodhala is here to help.

Hercules, “the god of all analytics platforms” is Bodhala’s trailblazing proprietary database that operates as a single source of truth for legal data, and provides our clients with a 360 view of the legal market.

Running on Hercules, the Bodhala platform has an intuitive dashboard that analyzes:

• Rates
• Observed discount percentages at relationship and practice area/work type level (anonymized)
• Matter types
• Factors that create peer sets, providing accurate apples-to-apples comparisons of cost and staffing

Our clients’ legal operations teams have championed their roles in response to varying cost pressures fueled by COVID.

With our platform, these legal teams have utilized data and metrics to review invoices with heightened scrutiny, implemented scorecards to create true side-by-side comparisons of law firm rates, shifted rate card negotiations to finance and procurement in order to focus on mission-critical work, and more. 

Bodhala’s COVID Resources

Even during times of economic turmoil, the legal industry continues to respond with inflated fees and a refusal to hold timekeepers accountable. This has a tragic consequence for your business.

Find efficiencies in your company’s legal spend — we’re here to help. Contact us to learn how Bodhala can assist with your spend optimization efforts.

Since the start of the Covid pandemic, Bodhala has fielded client requests for data-backed insights on how to handle their law firm payables. 

Despite the current economic situation, law firms continue to invoice clients at rates that are even higher than the previous year. 

Knowledge is power. Bodhala equips your corporate legal department with the information needed to navigate these trying times. 

Consider these suggestions from our team of legal experts when evaluating your department’s spend:

Are corporate legal departments paying outstanding invoices?

While every budget line item is being reevaluated, corporations have halted accounts payable in an effort to preserve working capital. We have seen numerous businesses skip out on their rent payments, renegotiate vendor contracts, and cut executive salaries significantly.

As “The Great Retrade” takes shape across industries and corporate legal departments evaluate invoices with heightened scrutiny, law firms can no longer shield themselves from the negative effects of a crisis. Law firm invoices from the first half of the year are likely to be recut at the end of the pandemic. 
Based on market data from recent years, Bodhala predicts that nearly $100 billion of invoices are currently outstanding. We project that only 50 to 65% of outstanding receivables from the first quarter of 2020 will actually be collected.

Can I renegotiate rates?

You should absolutely work with your law firm to establish new rates that reflect the current economic situation. Bodhala recommends restructuring all hourly billing models with significant adjustments to your current rate card – even if you currently receive a discount.

Rate cards have increased year-over-year, usually without explicit sign-off from the client. Consider implementing your last approved rate card as this can help your business realize savings of 15 to 20%.

How should I handle ongoing matters?

Pay close attention to the staffing on your matters, monitor associate and partner matriculation, and do not be afraid to ask for discounts – after all, it is your money. Any M&A transactions halted by COVID should receive significant dead deal discounts of 15 to 25% on accrued fees.

Is my law firm going to be around when this is all over?

With so much uncertainty still on the horizon, it is not guaranteed that your law firm will be left standing when this is all said and done. Should your law firm go under, make sure you can pivot accordingly to a backup firm that can handle any mission-critical legal services. Stay informed on your law firm’s performance during these unprecedented times by requesting an economic health statement. Do not let your company be the last to pay a flopping firm.

Bodhala is here to help.

Bodhala is your partner for optimizing your outside legal spend and holding your law firm accountable throughout these challenging times. Our platform and team of legal experts can provide you with actionable insights to manage your law firm relationships, handing the reins back over to your corporate legal department.

We understand the critical need to conserve cash and run your legal operations efficiently throughout this crisis. To learn how Bodhala can help with your spend optimization efforts, contact us at [email protected]

In each recent crisis – the dot-com collapse, the 9/11 attacks, the Financial Crisis – we have seen industries take major hits, adapting to the fiscal reality each has presented, and sharing in the pain. However, there is one group that has historically been exempt from the shared cost of these crises – the legal industry.

During each of these monumental crises, law firms established themselves as essential to the fate of your business as you navigated the uncertainty. In doing so, the industry maintained its pricing and performance almost seamlessly – even during times of economic peril. 

Take a look back at the 2009 financial crisis. While the lack of cash flow ran rampant in other industries, law firms experienced stability and even increases in their profits per partner (PPP). The top three firms grossed PPP of $4.3 million, $3.13 million, and $2.965 million respectively according to the AmLaw 100 rankings. 

In case you forgot, this was during an economic crisis. Sounds unfair, right?

Though they have gotten away with it in the past, the discrepancy in legal market income and market forces is no longer acceptable. As companies struggle to navigate their new reality, law firms are seeing an influx in their workload. 

In a survey recently conducted by the Association of Corporate Counsel, over 10% of in-house lawyers, general counsels, and chief legal officers shared that they are outsourcing more work than usual to law firms as they look for additional support during the crisis.

If that is the case, wouldn’t you like to make sure you are hiring the right firm at the right price?

Good news – Bodhala is here to help you do just that. 

It is now more urgent than ever to find efficiencies in your spend categories and to hold your law firm accountable for their fees.

Bodhala was built on the foundation that the legal market is not special – it is just like any other sophisticated market service and should act accordingly through economic undulations. 

Our platform refines organizational processes by empowering your legal team with deeper insights that allow you to better analyze, interpret, and optimize outside counsel spend. 

As the coronavirus pandemic has unraveled the past several weeks, we have witnessed the rapid downturn of our economy. It has left companies to retrade every billing line item – from real estate, to employees, to insurance. Companies are holding their bills, deferring payments, and renegotiating leases.

Among some of the largest industries to take a hit are airlines and real estate. 

Air travel has almost completely dissolved with US carriers cutting about 70% of flights this month. As a result, major US airlines including Delta, JetBlue, Southwest, United, and American applied for government aid in hopes of receiving a grant authorized through the stimulus package. 

Even with government assistance, Delta Airlines projects those funds only lasting until June as they burn through $60 million a day. The airline expects Q2 revenue to be down by 90 percent from 2019 and continues to add to the 35,000 employee volunteers taking unpaid leave.

Travelers aren’t the only ones staying away from the airline industry. 

Aircraft leasing investors, who once enjoyed hefty returns, are now dispersing left and right as dividend payments are suspended and payment schedules are renegotiated. 80% of Avalon Holdings Ltd. customers, one of the world’s largest plane lessors, sought payment relief within the past week.

Mass workforce layoffs have Americans strapped for cash and unable to make payments on time, or at all. As the first of the month approaches, many Americans are unprepared to make their rent payment with housing advocates in New York pushing for a statewide rent strike on May 1. 

It’s not just your average American that is worrying about making rent. Co-working giant, WeWork, halted rent payments at several US locations as “the great re-trade” begins to take shape in the real estate market. The company is looking for an asset-specific solution that benefits them and their over 600 global landlords.

Luxury fitness company, Equinox, recently issued a letter to their landlords to let them know that they should not expect the chain’s rent check at all. Equinox is temporarily not paying their vendors and they recently furloughed a number of employees.

Here is some food for thought:

If Delta Airlines can barely pay their employees, if WeWork has to renegotiate their leases, and if Equinox isn’t paying their rent or vendors – isn’t it time for you to rethink paying that hefty legal bill?

Bodhala is reimagining the legal services marketplace by providing legal market intelligence, insights, and guidance to corporations to optimize their legal operations. Our current economic climate makes the need to take control of your spend more critical than ever before. 

Our platform provides you with actionable insights to manage your law firm relationships and equips you with the logic needed to execute legal operations efficiently and effectively. Real transparency, real accountability, and real control.

As part of an ongoing series, we will be covering topics ranging from tactical “dos and don’ts” to navigating law firm payables and everything in between.

Like what you are seeing?

Download our free white paper to get data-backed and time-tested guidelines for understanding your RFP responses. You’ll also see a real-life example where our data saved a global bank millions on their rate negotiations.

Download The Full Guide

Shoot us an email at [email protected], and let’s talk about how to get started.

While companies face a financial collapse, bankruptcy & restructuring partners prepare for big paydays.

Article Highlights

• The coronavirus pandemic has a number of large retailers facing bankruptcy and restructuring.
• Law firms will reap the benefits of other companies’ financial collapse once more if they are not held accountable.
• Bodhala can serve as a resource for companies to ensure they hire the right lawyer at the right law firm at the right price.

Floor after floor of designer brands. Elaborate holiday displays emitting a sense of joy and a tinge of magic. Rushes of crowds fulfilling their Black Friday shopping lists. These happy memories that department stores once created have now been replaced by nail biting calls with creditors and endless meetings with Big Law firms as they prepare bankruptcy filings for numerous retail companies and their boards. 

The coronavirus pandemic has vaporized any aspect of normalcy we once knew and continues to decimate our economy, taking out businesses big and small. 

With shelter-in-place orders in effect for nearly two months now, non-essential businesses are feeling the hurt as some of the biggest names in retail fall victim to bankruptcy.

The current economic distress is leaving the likes of Neiman Marcus, Macy’s, and Nordstrom facing bankruptcy while JC Penney is now in advanced loan talks with existing lenders. 

Penney’s loan package could total between $800 million to one billion with bankruptcy filings potentially taking place within the next few weeks.

The rapid financial downturn has left department store chains with only a few choices:

1. Restructure debt directly with creditors;
2. Restructure with court assistance;
3. Liquidate entirely.

Sadly, any of these options come with law firm sticker shock. 

Sales and discounts? Those might exist in retail, but law firms are a different story. 

Even when companies find themselves in dire need of competitive pricing, the legal industry continues to respond with inflated fees and a refusal to hold timekeepers accountable. This has a tragic consequence to real people — like employees and suppliers.  

Now is not the time to dig deeper into your company’s pockets to pay the inflated fees law firms are charging. Bodhala’s proprietary data set serves as a valuable resource for companies at risk to ensure they don’t pay out tens of millions of dollars to their law firm while kicking their employees to the curb.

We can all learn a lesson from Toys “R” Us which filed for bankruptcy in 2017.

The beloved toy store chain that was part of so many of our childhoods turned into a feeding frenzy for Big Law as top firm Kirkland & Ellis took home $56 million.

Bodhala data shows that law firm rates for Toys “R” Us were 36.6% higher than similar “bet the company” litigation. These matters are plagued by too many attorneys on each filing, brief, meeting, call, and hearing.

Judge Keith Phillips reviewed and approved the firm’s fee application which listed the top two earners raking in over $3 million dollars while billing hourly rates between $995 and $1,480. 

105 partners and 131 associates at Kirkland & Ellis worked on the bankruptcy case with seven partners and associates billing over one million dollars EACH in fees. 

What did the Toys “R” Us employees take home you may ask?

The employees who missed out on Thanksgiving dinners to accommodate Black Friday shoppers, those who sacrificed family gatherings to cover a shift, the people who spent their birthdays working instead of celebrating…they must have received something – right?

Think again.

Employees received no severance pay. Nothing.

Did this have to happen? Absolutely not.

The Toys “R” Us bankruptcy was an outrage and led to the public shaming of the management and system that allowed the filing to pan out the way it did.

Yet companies are on track to see this happen again tenfold during the coronavirus pandemic.

The United States Trustee program is a component of the Department of Justice tasked with overseeing the administration of bankruptcy cases. Significant reputation risk is at stake if judges and US Trustees do not ensure rates are reasonable and aligned with other market rates.

So what’s the solution here?

Enter Bodhala.

It is time to hold your service providers accountable, including pricey law firms. 

Our market data provides transparency into the billable hour and actionable insights so that the US Trustee can operate effectively — instead of overseeing another massive law firm payday while an entire workforce gets kicked to the curb.

With over $15 billion in legal invoices and data from over 235,000 lawyers spread across 31,000 law firms — with the most sophisticated algorithms ever created in legal spend management —  we’re here to ensure that you hire the right lawyer at the right law firm at the right price.

Contact us at [email protected] to learn how Bodhala can help with your spend optimization efforts.

Dear Friends,

When I was a student at Harvard Law 20 years ago, I quickly noticed that law firms were like black boxes, billing hefty rates without much transparency or accountability. I now like to joke that people have more data about their underwear purchases on Amazon than corporate legal departments have about their law firms and how these firms deliver their services.

My experience at law school, coupled with my business partner Ketan’s 10 years as a corporate attorney, exposed us to the systemic cracks in the legal system. We saw law firms padding their wallets with more money than the assumed value they provided their clients.

We’re now in a moment of time where these cracks are about to get bigger. With COVID-19, we anticipate a rise in legal cases as companies turn to law firms to help them mitigate the negative financial impacts of this pandemic, from layoffs, to the grinding halt of M&A transactions, and to potential mass bankruptcies. 

After the dot-com crisis, 9/11 and the 2008 financial crisis, law firms increased their hourly billings, even as their corporate clients experienced significant hardships. In 2009, top law firms increased profits per partner (PPP) between 10 and 34 percent notwithstanding the financial chaos surrounding them, according to the AmLaw 100 rankings. 

This is why Ketan and I created Bodhala. We wanted to tackle the outdated legal marketplace to bring transparency to the billable hour and sophisticated economics to the legal industry—one where visibility and fair competition lead to the selection of the right lawyer at the right law firm at the right price.

With Bodhala, we created an AI-driven platform for the $500 billion legal services market. We provide essential 360-degree data on law firms and the analytical leverage needed to better allocate the legal market between its buyers and sellers. Our unique data and platform thereby provides us the opportunity to sit at the center of the dynamic legal ecosystem.

We brought the Bodhala platform to market in 2016 serving clients in financial services, healthcare services, insurance, energy, and private equity. Within the past year, we’ve experienced 300+ percent growth in both revenue and headcount and look forward to continuing on this trajectory in 2020. Today we are excited to announce our first institutional round—$10 million in growth capital led by Edison Partners. 

When we first met Edison’s Dan Herscovici, we knew it was a fit because he understood our mission to deliver groundbreaking legal technology solutions to empower companies to analyze, interpret, and optimize outside counsel spend, trailblazing a new era of legal market intelligence with real transparency, real accountability, and real control.  

With this financing, we are going to accelerate sales and marketing as well as product expansion. Specifically, we want to enhance our datasets to become even more valuable to our clients. Edison Partners has helped build great software businesses in other verticals so we are excited to have their expertise as we look to expand.

I look forward to sharing more great things to come as we usher in a market-driven economy to the legal industry and deliver more value to our customers. 

Sincerely,

Raj Goyle, CEO

Article Highlights:

• “The Great Retrade” is happening across a number of industries, affecting companies big and small.
• For the first time ever, law firms are unable to avoid the shared economic struggle and must participate in “The Great Retrade.”
• Some firms will find themselves at risk during COVID-19.
• Law firm’s clients are deferring payments and halting work.
• Bodhala predicts significant renegotiation of legal bills during and after COVID-19.

“The Great Retrade”

As COVID-19 continues to devastate our economy, “The Great Retrade” is taking shape for companies big and small.

From the real estate industry to airlines, insurance, and hospitals – every line item in a company’s budget is being retraded in an effort to stay afloat amidst the chaos. This is reported all day in the financial papers and television.

Less well known is that Bodhala’s data has shown fewer bills being paid throughout March and April and we’re hearing first-hand the struggles on our Client Success calls.

Although they’ve historically sheltered themselves from previous crises, law firms must now also share in the pain each of the aforementioned industries is experiencing. Let’s take a glance at the new realities companies are facing.

Law Firms:

Our law firm health models are projecting financial troubles in the second half of 2020 for the top firms dependent on M&A due to the slowdown in global and private equity M&A that began in March. Given these firms’ dependence on such matters and the high profit yield these present, much will depend on the firms’ lines of credit with their banks.

Bodhala predicts a significant number of the first half of 2020 legal bills will be recut at the end of COVID-19.

Court closures, holds on settlement conversations, and a loss of new deals have left law firms with no choice other than to reduce their staff and payments.

Cadwalader, Wickersham & Taft LLP has cut associate salaries by 25 percent while partners are no longer receiving compensation. 

Pryor Cashman LLP has furloughed some associates, a once unprecedented thought, although the firm expects to bring them back in the near future.

Baker Donelson slashed compensation for associates and staff by 20 percent as they realize that law firms have become an afterthought with clients halting the firm’s current work and deferring payments.

Real Estate:

At the start of each month, there’s one thing on landlords’ minds – rent checks. However, the coronavirus has thrown a wrench in this expectation as renters struggle to make their payments. Through the end of the first week of the month, one-third of American renters had not yet sent in their rent check. 

Think it’s just your average Joe struggling to pay rent? Think again. Here’s a quick rundown of how some corporate giants are handling April rent –

Nike is renegotiating leases as they closed stores last month and anticipate the closure carrying on for the foreseeable future.

Petco paid 25% of their April rent and stated in a letter to landlords that the payment was made “under protest and duress in anticipation of potential future withholding.”

Ross Stores have halted rent payments while stores remain closed. Once stores reopen, they’ll pay rent equivalent to roughly two percent of sales until their sales reach 70 percent of the revenue received at the same period in 2019.

WeWork is individually reaching out to its roster of over 600 global landlords as the co-working company has halted rent payments at several US locations and alternatively looks for an asset-specific solution to benefit both parties.

Equinox, though to the dismay of owner Related, has advised landlords that the luxury fitness company will not be paying April rent.

Subway, prior to the start of the month, alerted their landlords that they will reduce or postpone their April rent payment. Additionally, the fast food chain is cutting royalty payments in half.

Insurance:

With shelter-in-place orders in effect and Americans buckling down at home, auto-insurance carriers are citing a dramatic drop in accident claims as mileage was down between 35 to 50 percent across the US. 

As a result, some auto-insurance carriers are making the move to payout the anticipated amount of claims they expected to send customers this year – even though they no longer have to.

AllState is issuing over $600 million in shelter-in-place checks to customers as the company looks to provide help when it’s needed most. 

American Family Insurance followed suit as it’s returning $200 million to its policyholders.

Additionally, many insurers have extended payment plans and waived late fees to ease up on the financial qualms Americans are experiencing during COVID-19.

Air Travel:

The vaporization of air travel during the coronavirus pandemic has airlines scrambling to make up for lost revenue.

United and Delta have reached out to their respective credit partners to discuss selling miles ahead of schedule and at a steep discount. 

Delta Airlines pledged a number of airplanes for a $2.6 billion credit line from banks as the airline continues to burn through $60 million a day.

American Airlines arranged a $1 billion loan led by Citigroup which included a second mortgage on its most valuable route – New York to London Heathrow.

Hospitals:

As if hospitals weren’t already overwhelmed enough – they’re facing the overarching issue of increased expenses at a time of little to no revenue.

Hospitals across the nation are in the process of increasing ICU bed count, a necessary yet costly task. Bringing a regular hospital ward up to ICU level entails the implementation of expensive equipment such as heart monitors, oxygen monitors, and ventilators. 

Along with equipment, hospitals are increasing staffing as they care for the drastic number of COVID-19 infected patients. 

Hospitals, including Cedar Sinai and Harbor-UCLA in Los Angeles, have cut back on lucrative elective procedures in order to make more room for those affected by the coronavirus. 

This will result in a loss of millions of dollars of revenue at each hospital. 

Pay Cuts:

In an effort to conserve cash during the crisis, company executives are taking pay cuts up to 100 percent as they navigate the uncertain COVID climate.

Disney executives have taken pay cuts up to 30 percent with no definitive end date. Company Chairman, Bob Iger, has passed up his salary entirely as Disney furloughed over 43,000 employees.

Boeing CEO, Dave Calhoun, and Board Chairman, Larry Kellner, are both foregoing their 2020 salaries. 

GE CEO, Lawrence Culp, has given up his full salary while David Joyce, the company’s Vice Chairman and President and CEO of GE Aviation will forego half of his salary. 

Lyft co-founders, Josh Zimmer and Logan Green, have pledged to donate their salaries through June.

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Informed decision making is more critical than ever as you manage expenses throughout this economic turmoil. Don’t let your business make the mistake of shelling out more money than you need to. Bodhala is here to help by providing real transparency, real accountability, and real control. 

Dear Friends,

We’re excited and proud to announce our new branding and logo. It marks the next phase in our journey and a new opportunity to deliver groundbreaking legal technology solutions to in-house legal teams.

You’ll see it’s not just our logo that’s changing. We’ve changed our website, our social media, our messaging, and our focus to better reflect the way we help our clients succeed.

It’s an exciting era for Bodhala — our steady growth has brought new clients, new teammates, and new products that are reimagining the legal services marketplace. By providing legal market intelligence, insights, and guidance to corporations, we’re able to help them optimize their legal spend and maximize their relationships with their law firms. 

Since signing our first client in 2016, we have seen multiple new trends surface in the legal industry, but we’re the first and only technology company that provides corporate legal departments with the “source of truth”  — real time, actionable data that unmasks law firm pricing and inefficiencies, empowering corporations to drive value on every dollar of legal spend.  

Our continued mission is to empower teams to analyze, interpret and optimize outside counsel spend, trailblazing a new era of legal market intelligence with real transparency, real accountability, and real control.

If you want to learn more about our product stack and legal market trends, I encourage you to visit our new website where you can sign-up for our webinars, check out our blog and industry-specific case studies. 

As always, if you have any questions, please don’t hesitate to reach out! Until then, we’ll keep working tirelessly to bring value to legal departments all over the world.

Sincerely,

Raj Goyle, CEO

Friends, Colleagues & Partners,

The COVID-19 outbreak is an unsettling time. Our sincere hope is that you are healthy, safe, and secure during this extraordinarily challenging period. As the situation has unfolded these past few weeks, and as we continue to work remotely, I wanted to briefly share how Bodhala has acclimated and performed. 

Our crisis-management plan has exceeded expectations to date — I will continue to monitor developments closely.  

I am grateful that our Client Success, Tech, and Product teams have been able to deliver all of our work seamlessly and on time. Specifically, Bodhala has taken the proper precautions to ensure the following:

• Each Bodhala team member is secure and safe while working remotely. All employees are fully equipped with the technology required to continue working on all client matters without disruption. Key employees assigned to your company’s matters have complete access to all pertinent information needed to execute their work.
• The Bodhala platform is secure and will not experience any data interruptions. Invoice data will continue to be ingested on its regular cadence and your team will have uninterrupted access to the cloud-based Bodhala platform.
• Although working remotely, productivity has not diminished – in fact, many team members have expressed higher productivity levels during this time. Each employee is working efficiently and tirelessly on all business matters. We stand at the ready to support you and your team.

To guarantee we stay focused on the tasks at hand, I convene our senior leadership team twice daily to provide updates on each team’s work and to address any concerns that arise. We pay very close attention to the health — physical and mental — of each employee.

In these uncertain times, finding efficiencies in your enterprise’s spend categories has never been more urgent. Bodhala is here to help you. 

Our team continues to lean into our work and we are more passionate than ever about the service and success we provide to you. We remain intently focused on our mission to deliver groundbreaking legal technology solutions to empower you to analyze, interpret and optimize outside counsel spend.

We are incredibly grateful for your partnership and continued support. Together, we will navigate this uncertainty and come out stronger because of it. Should you have any questions or concerns, please do not hesitate to reach out to me directly.

Thank you.

Sincerely,

Raj, CEO